The Company’s equity method joint ventures, which are included in Investments in and Advances to Joint Ventures in the Company’s consolidated balance sheet at December 31, 2018, are as follows:

Unconsolidated Real Estate Ventures	Partner	Effective Ownership Percentage		Operating Properties
DDRTC Core Retail Fund, LLC	TIAA – CREF	15.0%		23
DDRM Properties	Madison International Realty	20.0		35
BRE DDR Retail Holdings III	Blackstone Real Estate Partners		5.0	16
Dividend Trust Portfolio JV LP	Chinese Institutional Investors	20.0		10
BRE DDR Retail Holdings IV	Blackstone Real Estate Partners	5.0		5
DDR – SAU Retail Fund, LLC	State of Utah	20.0		12
Other Joint Venture Interests	Various	20.0–79.45		5

Condensed combined financial information of the Company’s unconsolidated joint venture investments is as follows (in thousands):

	December 31,
	2018			2017
Condensed Combined Balance Sheets
Land	$	1,004,289		$	1,126,703
Buildings		2,804,027			3,057,072
Fixtures and tenant improvements		221,412			213,989
		4,029,728			4,397,764
Less: Accumulated depreciation		(935,921	)		(962,038	)
		3,093,807			3,435,726
Construction in progress and land		56,498			53,928
Real estate, net		3,150,305			3,489,654
Cash and restricted cash		94,111			155,894
Receivables, net		44,702			51,396
Other assets, net		186,693			174,832
	$	3,475,811		$	3,871,776

Mortgage debt	$	2,212,503		$	2,501,163
Notes and accrued interest payable to the Company		5,182			1,365
Other liabilities		161,372			156,076
		2,379,057			2,658,604
Redeemable preferred equity – SITE Centers^(A)		274,493			345,149
Accumulated equity		822,261			868,023
	$	3,475,811		$	3,871,776

Company's share of accumulated equity	$	145,786		$	132,710
Redeemable preferred equity, net^(B)		189,891			277,776
Basis differentials		(8,536	)		(24,973	)
Deferred development fees, net of portion related to the Company's interest		(2,700	)		(3,065	)
Amounts payable to the Company		5,182			1,365
Investments in and Advances to Joint Ventures, net	$	329,623		$	383,813

(A)	Includes PIK that has accrued since March 2017 of $12.2 million and $6.3 million, which was fully reserved by the Company at December 31, 2018 and 2017, respectively.

(B)	Amount is net of the valuation allowance of $72.4 million and $61.0 million and the fully reserved PIK of $12.2 million and $6.3 million at December 31, 2018 and 2017, respectively.

	For the Year Ended December 31
	2018			2017			2016
Condensed Combined Statements of Operations
Revenues from operations^(A)	$	427,467		$	502,506		$	513,365
Expenses from operations:
Operating expenses		125,353			145,855			144,984
Impairment charges^(B)		177,522			90,597			13,598
Depreciation and amortization		145,849			180,337			195,198
Interest expense		96,312			107,330			132,943
Preferred share expense		24,875			32,251			33,418
Other (income) expense, net		24,891			25,986			23,513
		594,802			582,356			543,654
Loss before gain on disposition of real estate		(167,335	)		(79,850	)		(30,289	)
Gain on disposition of real estate, net		93,753			101,806			57,261
Net (loss) income attributable to unconsolidated joint ventures	$	(73,582	)	$	21,956		$	26,972
Company's share of equity in net (loss) income of joint ventures	$	(2,419	)	$	3,516		$	11,650
Basis differential adjustments^(C)		11,784			5,321			4,049
Equity in net income of joint ventures	$	9,365		$	8,837		$	15,699

(A)	Revenue from operations is subject to leasing or other standards.

(B)

For the years ended December 31, 2018, 2017 and 2016, the Company’s proportionate share was $13.1 million, $5.0 million and $2.7 million, respectively. The Company’s share of the impairment charges was reduced by the impact of the other than temporary impairment charges recorded on these investments, as appropriate, as discussed below.

(C)

The difference between the Company’s share of net income (loss), as reported above, and the amounts included in the Company’s consolidated statements of operations is attributable to the amortization of basis differentials, unrecognized preferred PIK, the recognition of deferred gains, differences in gain (loss) on sale of certain assets recognized due to the basis differentials and other than temporary impairment charges.

Revenues earned by the Company related to all of the Company’s unconsolidated joint ventures and interest income on its preferred interests in the BRE DDR Retail Holdings joint ventures are as follows (in millions):

	For the Year Ended December 31,
	2018		2017		2016
Revenue from contracts:
Asset and property management fees	$	18.8	$	21.4	$	25.7
Development fees and leasing commissions		6.9		9.1		7.5
Total revenue from contracts with customers		25.7		30.5		33.2
Other:
Interest income		19.0		25.9		33.4
Other		2.6		2.8		2.9
Total fee and other income	$	47.3	$	59.2	$	69.5

The Company’s joint venture agreements generally include provisions whereby each partner has the right to trigger a purchase or sale of its interest in the joint venture or to initiate a purchase or sale of the properties after a certain number of years or if either party is in default of the joint venture agreements. The Company is not obligated to purchase the interests of its outside joint venture partners under these provisions.

In November 2018, the Company contributed 10 properties, aggregating 3.4 million square feet of Company-owned GLA, into a 20% owned unconsolidated joint venture, Dividend Trust Portfolio JV LP, which was valued at $607.2 million. Concurrent with formation of the partnership, the joint venture entered into a $364.3 million mortgage. As the Company does not have economic or effective control, the Dividend Trust Portfolio JV LP is accounted for using the equity method of accounting. The Company provides leasing and property management services to the joint venture. The Company recorded a gain on sale of $186.4 million in 2018 as a result of this transaction.

The Company’s joint ventures sold 40, 15 and 17 shopping centers and land for an aggregate sales price of $786.5 million, $545.6 million and $214.6 million, respectively, of which the Company’s share of the gain on sale was $13.7 million, $5.7 million and $13.8 million for the years ended December 31, 2018, 2017 and 2016, respectively. Included in the 2018 shopping center dispositions were three assets sold by two of the Company’s unconsolidated joint ventures to the Company for $35.1 million (Note 5).

The Company’s two unconsolidated investments with The Blackstone Group L.P. (“Blackstone”), BRE DDR Retail Holdings III (“BRE DDR III”) and BRE DDR Retail Holdings IV (“BRE DDR IV” and, together with BRE DDR III, the “BRE DDR Joint Ventures”), have substantially similar terms.

An affiliate of Blackstone is the managing member and effectively owns 95% of the common equity of each of the two BRE DDR Joint Ventures, and consolidated affiliates of SITE Centers effectively own the remaining 5%. The Company provides leasing and property management services to all of the joint venture properties. The Company cannot be removed as the property and leasing manager until the preferred equity, as discussed below, is redeemed in full (except for certain specified events).

The Company’s preferred interests are entitled to certain preferential cumulative distributions payable out of operating cash flows and certain capital proceeds pursuant to the terms and conditions of the preferred investments. The preferred distributions are recognized as Interest Income within the Company’s consolidated statements of operations and are classified as a note receivable in Investments in and Advances to Joint Ventures on the Company’s consolidated balance sheets. Blackstone has the right to defer up to 2.0% of the 8.5% preferred fixed distributions as a payment in kind distribution, or “PIK.” The preferred investments have an annual distribution rate of 8.5% including any deferred and unpaid preferred distributions. Blackstone has made this PIK deferral election since the formation of both joint ventures. The cash portion of the preferred fixed distributions is generally payable first out of operating cash flows and is current for both BRE DDR Joint Ventures. The Company has no expectation that the cash portion of the preferred fixed distribution will become impaired.

The unpaid preferred investment (and any accrued distributions) is payable (1) at Blackstone’s option, in whole or in part, subject to early redemption premiums in certain circumstances during the first three years of the joint ventures; (2) at varying equity sharing levels with the common members under certain circumstances including specified financial covenants, upon a sale of properties over a certain threshold; (3) at SITE Centers’ option after seven years (2021 for BRE DDR III and 2022 for BRE DDR IV) and (4) upon the incurrence of additional indebtedness by the joint ventures in excess of a certain threshold. Specifically, for BRE DDR III, based upon the cumulative asset sales through December 31, 2018, net asset sale proceeds will be allocated at 52.5% to the preferred member and 47.5% to the common equity. For BRE DDR IV, the preferred investment is collateralized by assets in which SITE Centers has a 5% common equity interest for 95% of the value and by an additional three assets in which SITE Centers has a nominal interest. The repayment of the BRE DDR IV preferred investment prior to 2022 is first subject to a remaining minimum net asset sales threshold of $4.9 million, of which $1.1 million is allocated to the preferred member; 100% of the net asset sale proceeds generated thereafter are expected to be available to repay the preferred member.

As of December 31, 2018, the Company has a valuation allowance recorded on each of the BRE DDR III and BRE DDR IV preferred investment interests of $58.7 million and $13.7 million, respectively, or $72.4 million in the aggregate on a net basis. The valuation allowances initially were triggered in 2017 by an increase in the estimated market capitalization rates for the underlying real estate collateral of the investments since the original formation of the joint ventures. The values of open air shopping centers anchored by big box national retailers, particularly in secondary markets, have been under increasing pressure and decreased starting in 2017 due to the continued perceived threat of internet retail competition and tenant bankruptcies. Several large national retailers filed for bankruptcy in the beginning of 2017 and have continued in 2018. A majority of the shopping centers collateralizing the preferred investments are those that have been most impacted by the rising capitalization rates. These factors have also reduced the number of potential investors and well-capitalized buyers for these types of assets. The managing member of the two joint ventures exercises significant influence over the timing of asset sales. Due to the Company’s expectation regarding the likely timing of asset sales, the valuation of the Company’s investments considers how management believes a third-party market participant would value the securities in the current higher capitalization rate environment. As a result, the investments were impaired to reflect the risk that the securities are not repaid in full in advance of the Company’s redemption rights in 2021 and 2022. The Company reassesses the aggregate valuation allowance quarterly based upon actual timing and values of recent property sales as well as current market assumptions. Adjustments to the valuation allowance are recorded as Reserve of Preferred Equity Interests on the Company’s consolidated statements of operations. The Company recorded an aggregate valuation allowance adjustment of $11.4 million and $61.0 million, for the years ended December 31, 2018 and 2017, respectively. The Company will continue to monitor the investments and related valuation allowance, which could be increased or decreased in future periods, as appropriate.

As discussed above, the preferred 8.5% distribution rate has two components, a cash interest rate of 6.5% and an accrued PIK of 2.0%. As a result of the valuation allowances recorded, effective March 2017, the Company no longer recognizes as interest income the 2.0% PIK (aggregating $12.2 million and $6.3 million at December 31, 2018 and December 31, 2017, respectively). Although Blackstone has the right to change its payment election, the Company expects future preferred distributions to continue to include the PIK election. The recognition of the PIK interest income will be re-evaluated based upon any future adjustments to the aggregate valuation allowance, as appropriate.

The Preferred investments are summarized as follows (in millions, except properties owned):

		Preferred Investment (Principal)									Properties Owned
	Formation	Initial		December 31, 2018		Valuation Allowance			Net of Reserve		Inception		December 31, 2018
BRE DDR III	2014	$	300.0	$	191.2	$	(58.7	)	$	132.5		70		16
BRE DDR IV	2015		82.6		66.7		(13.7	)		53.0		6		5
		$	382.6	$	257.9	$	(72.4	)	$	185.5

In 2016, the Company sold its approximate 25% membership interest in 10 assets to its joint venture partner and recorded a loss on sale of $1.1 million, which is included in Loss on Sale and Change in Control of Interests, net, in the Company’s consolidated statement of operations.